An Alabama motor carrier who sued Pilot Flying J in connection with a diesel-fuel rebate scam has added a claim that it was “fraudulently induced” into believing it was being given “retail-minus” or “cost-plus” prices for diesel it purchased.
In a May 8 federal court filing, Wright Transportation Inc., based in Mobile, said officials at the truck stop chain promised the “best deals in the industry” but in fact duped the carrier into generally paying up to 2 cents a gallon more than it had promised.
Wright said that, in 2009, Pilot made representations that reiterated it was going to pass fuel savings along, generally charging the carrier either a retail-minus price of 2 cents a gallon or cost-plus per gallon over the actual amount Pilot paid in acquiring the diesel fuel.
“This is a case about the well-known rebate fraud defendant Pilot Travel Centers LLC inflicted on its thousands of trusting customers, but it is also about an additional aspect of that rebate fraud that has not received the same level of notoriety and press coverage, and yet likely dwarfs in financial size the rebate fraud,” a Wright court filing said May 11.
Wright said that when Pilot says “cost,” what it really means is the Oil Price Information Service contract average benchmark, plus a transportation fee, state and federal taxes, a fee “for any additives Pilot may elect to add" and “undisclosed and undescribed other fees.”
That is a reference to an $84.9 million settlement in 2013 from Pilot to reimburse as many as 5,500 customers included in a class-action lawsuit against the company.
Pilot attorney Aubrey Harwell said the Oil Price Information Services contract average used by Pilot is simply the industry standard.
“For many years, Pilot has been totally transparent about the basis for cost,” Harwell told the Associated Press. “They have not taken advantage of any customers, notwithstanding the allegations by a select few to the contrary,” Harwell said.
“What Pilot has failed to tell this court is that out of 5,500 Pilot customers, not one of them has been compensated for the cost fraud,” Wright said.
Pilot has been under investigation since FBI agents raided the company’s Knoxville, Tennessee, headquarters in April 2013.
Last year, Pilot agreed to a $92 million penalty as part of an agreement with the federal government to take responsibility for the criminal actions of employees who shortchanged trucking companies on their diesel-fuel rebates.
So far, 10 executives have entered into plea bargain agreements that require them to cooperate with federal investigators, but they have yet to be sentenced.
While the government said it would not prosecute the company, the agreement provides no protection from potential prosecution to any individuals.
